Cloud mining: what it is, how it works and advantages over hardware mining

There is a way to minbitcoins without having to invest in equipment or take mining courses. It is about cloud mining , and then we are going to explain what it is and how it works.

 

What is cloud mining or cloud mining?

Cloud mining consists of processing bitcoin transactions from the cloud and although it is similar to classic cryptocurrency mining , it has nothing to do with it.

This process, also called mining bitcoins in the cloud, is carried out by the miners, who are automatically rewarded by the system, and rewarded by the users.

Everything is done remotely, through a data center with shared processing capacity. In this way, users do not require hardware to mine, since the most common thing is to hire a company.

How does cloud mining work?

Normally, interested users register on a platform that offers this type of service, and buy contracts or shares within it.

Through these contracts, users can use mining services and earn profits from them. When a minimum amount is reached, the proceeds can be withdrawn.

On the other hand, for companies, being able to sell contracts and rent hashing power makes them minimize risks .

Reliable companies usually have large facilities with hardware equipment , stable electrical services, a specialized technical team, etc. And selling these contracts helps them get money immediately to meet all expenses. They can also get new equipment to increase their computing power.

Advantages of using cloud mining

The main advantages of mining bitcoins in the cloud are the following:

• There is no need to buy mining equipment , since it is enough to have a computer.
• You do not suffer from the heat generated by the equipment or the noise .
• There are no electricity costs .
• There are many cloud mining companies that have data centers in Iceland or Georgia, where electricity is very low cost .
• No used cryptocurrency mining equipment to sell .
• You can start with very low rates , such as those that correspond to a gigahash.
• It is possible to participate in the best bitcoin cloud mining without the need to maintain the hardware yourself.

Types of cloud mining

There are different ways to do cloud mining :

• Acquire hashing power : it is the most common way to do cloud mining, since a large number of companies dedicated to selling hash rate (unit of measurement of the energy consumed by the bitcoin network for its operation) have emerged. You do not need to have the miner or know how to configure it, since you simply have to outsource a certain hash rate to a company.
• Renting a physical server or a VPS (Virtual Private Server) : consists of renting a server and installing the mining software on it. The servers can be both dedicated and shared, and their management is carried out by the users remotely.
• Hosted Mining – Miners are hosted by a company. They usually keep the electricity and supply it to the miner, and as a business they can get cheaper electricity rates. It is not a very frequent type of cloud mining.

Cloud mining or hardware mining: which is better?

The truth is that if you are patient, cloud mining can be profitable . To which we must add that it is cheap and you do not have to do almost anything, in addition to the fact that anyone can do it with the money they can invest. This investment enables the chosen company to mine bitcoins and reward you with part of the profits.

This system is more advantageous than mining bitcoins with your own hardware , which costs a lot of money. In addition, you have to face the costs of electricity and the effort involved in maintaining it, cooling it, making the necessary arrangements, and checking its correct operation at all times. Without losing sight of the competition, which is very high at the moment.

Therefore, if you want to mine bitcoins and not another cryptocurrency, it is not advisable to dedicate yourself to hardware extraction . In cloud mining everything is much simpler, and in about six months you can start making profits.

Is crypto mining in the cloud profitable?

Yes, but you have to be very careful , since in most of the companies that are dedicated to this there are Ponzi schemes. Actually in almost all of them, which means that they are not trustworthy.

In reality, these companies do not mine cryptocurrencies, but use the money of their investors for themselves . Once they get new users, they also take their money and pay the previous ones, keeping part for them. And so always.

The companies that are legitimate can help to achieve profitability , but under certain conditions. Considering that the price of bitcoins will remain the same, it will take half a year to several years to break even, depending on the company, contracts, prices, etc. After all this, there will only be benefits.

That is, what you should not expect is to get great results quickly . This would only happen in the hypothetical case of starting to mine when bitcoin was at a minimum level, and it reached a new all-time high price very shortly thereafter. Which is frankly complicated to happen.

Opinion: is cloud mining worth it or is it a scam?

As we have already seen, it may be worth it but you have to know very well where to move . On the other hand, it must be taken into account that the value of cryptocurrency has a great influence on cloud mining. So, although cloud mining can be profitable, you have to think it through and act with great caution.

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